Debt

How It Feels to Pay Off $70,000 in Debt

By the time I finished my master’s degree in 2011, that “nonissue” undergrad loan had grown to $20,000, and I had $50,000 of brand-new debt to pile on top of it. This felt like a real, burdensome amount of money that I owed now. My first bill informed me that I was saddled with minimum monthly payments of roughly $700 for the next 10 years, with an astoundingly high portion going to interest.

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Magic Words That Will Save You $$$

Jake Halpern’s noir-ish story in the NYT Magazine about debt collection is scarier than Sin City. Poor Theresa! (We are all Theresa.)

there was little that Theresa could do; she had paid off her debt to the wrong collectors and had fallen into the debt underworld. If anyone was going to help her, it wouldn’t be the state attorney general, or the Better Business Bureau, or the F.T.C., or even the police, but the former banker and the former armed-robber who bought her debt.

The most valuable takeaway from the piece, as underlined by an interview Halpern gives Ira Glass on “This American Life,” though, is that a few magic words can make the whole nightmare go away.

Jake Halpern: [The lawyer] said, oh, well, when a consumer actually shows up in court and says the magic words, then these cases basically evaporate. And I say, the magic words? He says, yeah. Show me the evidence.

Ira Glass: Show me the evidence. In other words, show me where you got this number, $3,762.20. The Georgia Legal Services lawyer told Jake that if you’re standing before a judge and you say, OK, I don’t recognize this amount that you say I owe, and I want to see some documentation, I want to see account statements or whatever, because I have no way to know with certainty that this debt is really mine, the judge will usually turn to the other side and ask for the evidence. And in all likelihood, they’ll have no documentation and they’ll drop the case. And this is true not just in Georgia, but elsewhere. Because the way this business works, Jake says, when credit card companies sell these IOUs to debt collection companies, they usually don’t give them any documentation. Usually they just give them a spreadsheet with a long list of people who owe money on their credit cards and their addresses and the last payment and how much they owe, and not a whole lot more than that.

Amazing!! You have the right to remain silent, America, or to use the magic words that will set you free. Think you’ve got it down? Test your skills by playing the game!

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$1.4 Million in Assets, a Million in Debt

I usually enjoy reading the money makeover column in the Los Angeles Times, which runs every two months or so (and, coincidentally, was once written by Helaine Olen in the ’90s). The latest installment focuses on Ross and Michelle Meador, a couple who lives in Fullertorn with their three children and have $1.4 million in assets including a house in Berkeley that they rent out, but a million dollars in debt, including student loans, a mortgage, a HELOC (home equity line of credit—basically borrowing against your house), and mortgage debt.

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Let’s Throw Some Money at Our Problems: July 2014 Check-in

It’s time to check in on our debt payments and savings goals again. If you’re joining us for the first time, you can read about our decision to publicly keep track of our debt here.

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Catching a Break After Years of Barely Making Ends Meet

For the last seven years, I’ve been an adjunct professor of writing at three different institutions, while raising three kids mostly on my own. At the University of Oregon, that meant an annual, full-time salary of $27,000, though they offered me great benefits. At other schools, my salary ranged from $2,000/class to $4,000/class, though my cap was typically four or five classes a year, and never any work in the summer. This meant many summers (which would sometimes stretch to fall) on food stamps supplemented with a few trips to the food bank. It meant shopping at Goodwill, borrowing money from my mom or brother, floating checks, free lunch applications, payday loans. It also meant that I relied on friends for non-monetary help, too: picking up my kids from theater or chess, or getting groceries after I had back surgery, or just letting me vent and worry aloud about how hard it was to make ends meet.

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Nobody’s Default But My Own: What Happened When I Decided to Stop Paying My Credit Card Debt

I should have never gotten a credit card, and I knew it. Nobody without a job, savings, or assets of any kind should, especially if their income is less than their rent. It’s basic math.

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My Spreadsheet Summer

I’ve never really put myself on a budget before, which I find kind of shameful. Fed up with constantly being a couple hundred dollars behind on my Visa, I’ve decided to do something about it. I set up a spreadsheet, planning my budget over the next few months and will be obsessively tracking my progress. I’ve got a pretty simple set-up: one column for the date, one for the balance of each of my bank accounts, one for my Visa, and one for notes. It looks like this…

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Let’s Throw Some Money at Our Problems: June 2014 Check-in

It’s time to check in on our debt payments and savings goals again.

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Can I Give You $1,000 and NOT Be a Bridesmaid?

Bridesmaid costs are exorbitant, to the degree that should you bribe the bride $1000 to pick someone else, you’d still quite possibly save money over what you would have spent. An Alternet essay, reprinted in Salon, makes the point that when participating in a friend’s special day has the potential to bankrupt you, the situation is ridiculous and needs to change.

Much has been written about the average cost of a wedding as well the average cost of being a bridesmaid. A 2012 study by TheKnot.com and WeddingChannel.com reported that the average wedding budget was $28,427 – the highest number it had reached since 2008. And Mint.com estimated in 2011 that the average total cost of being a bridesmaid totaled $1,695. … The Today Show reported that approximately 10 percent of people said they went into debt simply to attend or be in a wedding.

How does this enormous number come to be? There are the obvious factors: the dress, which can cost anywhere from $100 to more than $400; and then the alterations, which can add another $100 or more; and the shoes which can ring up as anything from $30 to $150. Then there are all of the events related to the wedding: the showers, of which there are usually more than one (along with the customary bridal shower, recipe and lingerie showers are now the norm). Then there’s the bachelorette party, which, for many, has evolved from a night of bar hopping to a destination event that involves airfare or gas, a hotel and several expensive days and nights at spas, restaurants and bars. Factor in manicures, pedicures, hair and makeup for the wedding itself and the total cost could easily exceed that $1,695 average.

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One Year After I Faced My Student Loan Default

Last year I wrote a piece about how I finally faced the fact that my defaulted student loans weren’t going anywhere, and the surprisingly simple process I embarked upon to rehabilitate them. Now, 13 months after I made the first steps towards remedying my financial situation—mustering the courage to face my creditors, actually picking up the phone and asking for help, committing to slowly paying my debt back despite a not so lucrative salary—I am proud to say that my student loans have been successfully rehabilitated and I am no longer in default. I may be one of the only people in America to be thrilled that I owe Sallie Mae a large chunk of my hard earned cash. It’s amazing how perceptions can change when you finally owe semi-shady student loan overlords a boatload of money rather than completely ruthless and unrelenting run-of-the-mill debt collectors. It’s the little things that make me proud of how far I’ve come.

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